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L&T Tech to acquire Silicon Valley-based Esencia for $27 mn

04 May, 2017

L&T Technology Services Ltd, the technology services arm of engineering and construction company Larsen & Toubro Ltd (L&T), will acquire US-based design services provider Esencia Technologies Inc for $27 million (around Rs 173.4 crore) in an all-cash deal.

The acquisition, which also includes Esencia’s Indian subsidiary Esencia Technologies India Pvt. Ltd, will help L&T Technology deepen its offerings to global customers, the firm said in a stock exchange disclosure.

L&T Technology will acquire 100% stake, or 11.10 million shares of Esencia, from 18 shareholders. Top five shareholders own 89.18% in the company.

The amount will be paid in three tranches, with $9 million as the upfront payment, it said.

Santa Clara, California-based Esencia provides design services from specification to final product in digital signal processing for communications, video, security and networking. The company has a team of over 100 application-specific integrated circuit (ASIC) design and semiconductor experts in Silicon Valley.

“The acquisition of Esencia will enhance our global offerings in perceptual computing, advanced silicon and wireless networking technologies,” said Keshab Panda, CEO and managing director, L&T Technology Services.

Shares of L&T Technology fell 0.28% on the BSE to close at Rs 781.50 on Thursday. The benchmark Sensex rose 0.77% or 231.41 points to close at 30,126.21.

L&T Technology went public in September 2016 with a Rs 890-crore initial public offering (IPO). Parent L&T sold a 10.2% stake, valuing the company at Rs 8,800 crore.

At present, the company commands a market capitalisation of Rs 7,947.10 crore. Its shares are trading at a 10% discount to the price when it made the public market debut around nine months ago.

Esencia posted revenues of $18.2 million for the calendar year 2016, up 61.06% from $11.3 million in 2015, according to its stock exchange filing.

Esencia was co-founded in 2006 by former Intel Corp executive Alpesh Oza. Other co-founders include Balaji Tadepalli, Ravi Satrawada and Miguel Guerrero, who previously worked as a senior architect in Nvidia Corp, another Silicon Valley firm.

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L&T Tech to acquire Silicon Valley-based Esencia for $27 mn

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